Employee Health Insurance Premiums Skyrocket

WASHINGTON -- Premiums for employer-sponsored health insurance rose sharply over the past year and reached $15,073 for a family in 2011, a 9% increase over the previous year, according to the Kaiser Family Foundation.

Of that $15,073, workers are now paying an average of $4,129 for their health insurance each year, according to the non-profit group's annual Employer Health Benefits Study. Employers are paying the rest -- nearly $11,000.

Average premiums for family coverage have increased hugely in the past decade -- 112% since 2001 -- but the 9% increase seen over this past year was particularly sharp, the study found. Last year, family premiums grew by just 3%.

"This year's 9% increase in premiums is especially painful for workers and employers struggling through a weak recovery," Kaiser President and CEO Drew Altman, PhD, said in a press release.

For an individual, employer-sponsored coverage cost $5,429 in 2011, which is an 8% increase over the cost of an employer providing coverage for a single employee in 2010. The average single employee contributed $921 toward his or her coverage.

Premiums grew more than 2% faster than wages and more than 3% faster than general inflation, the study found.

The study doesn't explore the reasons for the increase this year, but Kaiser officials said certain provisions in the healthcare reform law may contributing to higher premiums.

Several of the law's provisions have already gone into effect, such as allowing about 2.6 million adult children to stay on their parents' plans until the age of 26, which may be causing premiums to be higher. About 70% of large firms have covered at least one dependent under the new provision, the survey found.

The survey was conducted between January and May of 2011 and included 3,184 randomly selected companies with three or more employees.

America's Health Insurance Plans (AHIP) said the survey is a sign that "more needs to be done to address the rising cost of health care."

"Policymakers in Washington and the states need to focus on all of the factors that are driving premium increases: soaring prices for medical services, changes in the covered population that has resulted in an older and sicker risk pool, and new benefit and coverage mandates that add to the cost of insurance," said Karen Ignagni, president and CEO of AHIP, in a press release.

Meanwhile, a separate survey from Consumer Reports found that concerns over cost are spurring a growing number of people to skip prescription drugs or medical procedures to save money in 2011 than in 2010.

Consumer Reports surveyed 1,226 people who currently take at least one prescription drug about their medication and healthcare use and found the number of people who reported skimping on medication and other medical treatments rose by 9 percentage points since 2010, from 39% to 48%.

About half of those surveyed said they put off a doctor's visit, delayed a medical procedure, or declined a medical test to save money. About one-third said they didn't fill a prescription, took an expired prescription, skipped a dose, split pills, or shared a prescription with someone else to save money.

The authors of the survey said it's the responsibility of doctors to find out if a patient can't afford their medication. Most patients surveyed (64%) didn't know what their prescription cost until they picked it up at the pharmacy.

"Doctors should think of themselves as stewards of their patient's care," he says, "and that includes considering their patient's ability to pay for treatment," John Santa, MD, director of the Consumer Reports Health Ratings Center, said in the report.